According to a 2016 HSBC report, concerns about skyrocketing healthcare costs — especially in the later stages of life when declines in health accelerate — are worrying the majority of pre-retiree Americans saving for retirement.

It's impossible to know for sure how much you might need for medical expenses. If there's one time when it makes sense to prepare for the worst and hope for the best, it's this one. Here are some ways to specifically save for medical expenses.

Consider a Health Savings Account

One of the best things you can do to guard against future medical costs is to start saving money before retirement. An ideal way to do this is to open a Health Savings Account.

"Think of an HSA like a little retirement account for future health expenses," explains Nate Purpura, vice president of consumer affairs at eHealth. "Like other retirement accounts, the money you save in an HSA gets special tax treatment."

Up to certain limits each year, your contributions are tax-deductible or can be made on a pre-tax basis through your employer. The money is yours to keep and rolls over each year. It earns interest on a tax-free basis, too. As long as you use the money for qualified medical expenses, you'll never be taxed on it. If you're 55 or older, you can make extra contributions to your account beyond the standard annual limits.

In order to start making contributions to an HSA, you must have a qualifying high-deductible health insurance plan. "Don't let 'high-deductible' scare you too much. These plans still meet all the coverage requirements of the Affordable Care Act," Purpura says. If you're curious, there's more information on these accounts here.

"Think of an HSA like a little retirement account for future health expenses."

Use a Flex Spending Account

Find out whether your employer offers a Flexible Spending Account (FSA). You can use the money you save to pay for co-payments, deductibles, some drugs, and several other healthcare costs. Using an FSA can also reduce your taxes. Learn more here.

Supplement Your Medicare

Many people think Medicare is a magic pill. "It only covers about 51% of all medical expenses in retirement," says Leslie Tayne, an attorney and author of Life & Debt.

Medicare Parts A & B have significant gaps in coverage, not just for prescription drugs, but for co-pays and deductibles, Purpura points out. "A good Medicare Supplement plan, paired with Part D (Rx) plan will fill those gaps for you. A good Medicare Advantage plan that includes Rx benefits can do the job too," he says.

Explore Long-Term Care Insurance

Approximately 70% of people over the age of 65 will require long-term care at some point in their lives, and a long-term care insurance policy will help provide and pay for the care at a nursing home, alternative living facility, or through a caregiver at home. "This type of care is specifically excluded by Medicare," says Benjamin Offit, a certified financial planner with Clear Path Advisory.

Be a Price-Savvy Healthcare Consumer

You know how to shop for sales on clothes, groceries, airfare, and cars, and that same thinking and energy should be applied to medical expenses. For example, prescriptions not covered by insurance can be costly. "Try to find therapeutic alternatives, consider switching to generic drugs, and consider using mail-order pharmacies," Tayne says.

Also, purchase drugs from Costco or Walmart. "Doing so will often give you cheaper prices than if you purchase them through insurance," says Nathan Garcia, a certified financial planner with Westbourne Investments.

Use Healthcare Apps

HealthiestYou, a digital healthcare services provider, has telehealth apps that connect members with a state-specific, board-certified physician. Users can get a diagnosis, treatment, and prescription if needed, for over 70% of typical doctor office visits, says Jim Prendergast, co-founder of HealthiestYou.

Furthermore, the HealthiestYou app can save members up to 85% on prescriptions with its Prescription Drug Pricing search engine. Search the medication name and see the listed prices for that drug at pharmacies near you.

Get Checkups, and Stay Healthy!

You know what they say about an ounce of prevention. Eat right, exercise, get annual checkups and flu vaccinations, and don't forget dental and vision exams as well. In the long run, being proactive keeps money in your bank account.

Says Garcia, "The easiest way to stay healthy is to monitor your health regularly. Why do you think boxers weigh themselves every day? To know if something is out of the normal immediately so they can do something about it."

Readers, how are you saving for your future health expenses? Share your tips and tricks in the comments below.

Sheryl Nance-Nash is a New York City-based freelance writer specializing in personal finance, small business, general business, and travel. Her work has appeared in The New York Times, Money, DailyFinance.com, Forbes.com, and many more.

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6 comments

I couldn't disagree more with @AllSeasonRadial about future healthcare.

This from someone who has friends in single payer systems.

We live near the border with Canada. We compete with Canadians for appointments at testing facilities, coming across and paying their own dear *cash* to get treatment before they die waiting in line.

Illegal private care is creeping back into Canada to address the shortfalls. The govt looks the other way - they know the truth.

There are a huge range of free market solutions we have not tried in the US. And we continue to ignore a big driver of cost - tort lawsuits. We spend far too much on redtape. We don't have transparent pricing so patients can compare providers.

In the US we seem to do everything possible to *interfere* with competition in healthcare.

As to pre-existing conditions, that might be the only place where a high risk pool *at the state level* should be implemented to isolate those risks from general population health insurance.

For those seniors who can afford it (and not many can these days), Medicare plus private secondary health insurance often results in bills that say, "No Patient Liability". IOW, all expenses have been paid. This is coming from someone who recently broke his leg in several places, requiring a 4-day hospital stay plus lots of pain medication and an 82-mile ambulance ride. Bills are still coming in with totals so far well over $25,000, and "NO PATIENT LIABILITY" printed on each one.

This article is highly remiss in leaving out the enormous importance of the political choices the United States makes in the voting booth. The more voters support profit-based medical care, the poorer the average person will become. Single payer is the only advanced way forward. Once that is passed, containment of medical costs can be addressed. That will assure quality care for current patients and subsequent generations.

Without it, expect medical care to drive you, your family and our nation into poverty

My FSA has been so useful, especially when larger unexpected medical expenses have come up. While you do pay for it with each paycheck, it comes out pre-tax which does save you some money. It also doesn't feel like you are using your "regular" money when you have to pay for co-pays, deductibles, etc.